Law: Sales Tax Act, 1990

Section: 13

Sales Tax Act (VII of 1990)---S.13-S.R.O. No.109/(1)/94, dated 8-2-1994---C.B.R. Letter C. No.3(6)GST-1/93, dated 4-4-1994--- Exemption---Accessory--- Floor mats---Supply of, as accessories to a vehicle manufacturer ---Taxability--­Validity---Floor coverings were admittedly used in all motor cars for comfort and beauty and accordingly goods were covered within phrase "accessory"---"Accessory" falling within the framework of respective heading, that is in the corresponding classification stands exempt for payment of sales tax within the framework of S.R.O. 109(1)/94, dated 8-2-1994. Webster's Third New International Dictionary ref. ORDER ZAFAR IQBAL, MEMBER (TECHNICAL). ---This appeal has been filed by the Sales Tax Department against the orders of the Collector of Customs, Appeals, Karachi, dated 28-7-1999; whereby the appellate authority allowed the first appeal of the respondent by treating his supply of goods as exempt. 2. The facts leading to the present appeal are that the respondent namely, Messrs Unik Fabrics (Pvt.) Ltd., who is a sales tax registered person did supply (mats) as accessories to a vehicle manufacturer for use of the same in the assembly of motor cars. The goods so supplied were exempt in terms of Notification No.109(1)/94, dated 8-2-1994 at the relevant time. 3. The Sales Tax Department objected to the taxpayer's practice of claiming exemption on floor mats. It was their point of view that floor mats are not assessable within the framework of Chapter 87 of the 1st Schedule to the Customs Act, 1969, as such these goods cannot acquire the status of spare parts or accessories, hence the supply made by the taxpayer was liable to sales tax. 4. The respondent on the other hand contended before the first Appellate Authority that the supply made by them- is that of an accessory and the same is exempt in terms of S.R.O. 109(1)/94. 5. We have heard the appellant at length. In order to appreciate his point of view, it would be appropriate to reproduce the provisions of S. R. O. 109(1)/94. The same are as under: " ....S.R.O. 109(1)/94.---In exercise of powers conferred by subsection (1) of section 13 of Sales Tax Act, 1990 the Federal Government is…

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